The Cost of Being Under the Weather: Droughts, Floods, and Health-Care Costs in Sri Lanka

We measure the impact of extreme weather events—droughts and floods—on health-care utilization and expenditures in Sri Lanka. We find that frequently occurring local floods and droughts impose a significant health risk when individuals are directly exposed to these hazards. Individuals are also at risk when their communities are exposed even if they themselves are unaffected. These impacts, especially the indirect spillover effects to households not directly affected, are associated with land use in affected regions and access to sanitation and hygiene. Finally, both direct and indirect health risks associated with floods and droughts have an economic cost: our estimates suggest that Sri Lanka spends $19 million per year directly on health-care costs associated with floods and droughts. This cost is divided almost equally between the public purse and households, with 83% of it spent on flood-related health care and the rest on drought-related health care. In Sri Lanka, both the frequency and intensity of droughts and floods are likely to increase because of climatic change. Consequently, the health burden associated with these events will likely increase.